Let There Be Light Crude

Evangelical preachers claim that a giant oil find in Israel will usher in the end of days. Enter the con men and penny-stock hustlers.

Brown was so convinced that in 1985 he quit his job and moved to Houston, where he tried to drum up support for an Israeli drilling venture. But investors weren't eager to back a greenhorn on a mission from God, especially in the midst of an industry slump. So Brown waited and prayed and lived off his savings. By 1996, utterly broke, he ended up scrubbing toilets at a Baptist church for $4 an hour before moving back to Michigan, where he slept in his brother's basement. "Talk about one whipped dog: I was it," he says.

It took him two years to get back on his feet, but he never lost sight of his dream and finally founded Zion in 2000 with the help of Philip Mandelker, an oil-industry attorney who was also deeply involved with Ness. Early investors pitched in enough money to complete one drilling project near the land Brown believes once belonged to Asher, the Israelite Moses predicted would "dip his foot in oil." Last spring, the company held its initial public offering on the American Stock Exchange, raising more than $12 million.

Unlike Ness, Zion is a legitimate wildcatting venture, with respected geologists on its board of directors. Still, some of its activities are questionable. The firm was first brought to wide attention by Hal Lindsey, host of the prophecy-focused TV show The Hal Lindsey Report and coauthor of the best-selling The Late Great Planet Earth. Lindsey has bet very publicly on Brown's company, telling his viewers in March 2007 that "Zion Oil right now is on the verge of discovering oil," a sign that "we are really on the very threshold of Lord Jesus' return." Around the same time, he touted the company in his column on the popular conservative website WorldNetDaily, saying, "Zion Oil has sunk eight exploratory wells, all of which have shown signs of oil and gas" (it has, in fact, sunk just one), and suggesting Israel's oil "could rival that of Saudi Arabia."

What Lindsey neglected to mention was that he and his relatives own millions of dollars of stock in the company. In 2002, John Brown gave Lindsey a gift of 50,000 shares, worth $337,500 at today's price. Ralph Devore, Lindsey's cousin and a director of his ministries, controls nearly 725,000 shares, worth about $4.9 million. Devore was also a founding member of Zion's board and was at one point hired to promote the company.

Brown insists his motives for the gift were pure. "It was simply in my heart to give shares to people who loved Israel," he says. But Lindsey's support has clearly paid off for the company. After he told television viewers that Zion was "on the verge" of an oil find, the trading volume of the company's stock leaped from 11,100 a day to 122,000 and the price climbed from $7.64 to $9.25 a share, a 21 percent increase. (Lindsey did not respond to requests for comment.)

In truth, Zion was never close to striking oil; at its very first stockholders' meeting this past June, the firm announced plans to temporarily abandon its only well due to technical problems. Afterward, John Brown climbed to the podium and arranged himself between an American flag and an Israeli one. Flipping his Bible open to the Book of Kings, he began reading a passage about the prophet Elijah, who heard "the sound of abundance" when Israel was in the midst of a crippling drought. No one else could hear the sound, but Elijah prayed and waited, and within hours "the heavens was black with clouds."

When he finished reading, Brown looked up and told his investors that he, too, heard "the sound of abundance." Zion is now laying plans for its next well.

at ness, meanwhile, the saga continues with a new cast of characters. The main player these days is Hayseed's son, Shannon "Sha" Stephens, who took the reins of the company after his father's death. Sha inherited his father's bulky build and cowboy style, not to mention his taste for life on the margins of the oil business. Before taking over at Ness in May 2003, he was president of Warrior Resources, a struggling oil and gas company, where he faced allegations that he spent the company's money on personal expenses and transferred its assets into his own name, according to a lawsuit filed in an Oklahoma District Court. (Sha did not respond to calls seeking comment.)

His first move at Ness was to announce a bold new business plan called the "New Outlook," which involved expanding the company's U.S. drilling operations to raise funds for its Israel venture. Shortly afterward, he sold Ness a handful of Texas oil and gas leases for $11.5 million. Most of them, the company later announced, "were lost due to lack of production."

Like his father, Sha used The Prophecy Club to spread deceptive claims about Ness' prospects, once telling listeners that the company had enough acreage in Texas for tens of thousands of wells, each bringing in $5,000 a day. With each misleading claim, the stock climbed, and insiders dumped millions of shares. Having milked the venture dry, Sha started folding up the company's operations in 2006, eventually selling its Texas headquarters that December. In July, Ness was wiped from the corporate register in Washington state, where it was incorporated. Yet even with the company seemingly in its death throes, in September Stephens and crew appointed a British businessman named Anthony Allenby as the new ceo—a move that drove up the stock 350 percent and triggered clauses that board members and executives had added to their contracts a couple of years before, giving themselves large cash payouts in the event of leadership changes. Stephens is in line to receive at least $750,000.

Allenby departed within a month, leaving the company $30 million in the red, with no staff, no offices, and no clear claims to any drilling rights. (During his tenure he declined Mother Jones' interview requests, but warned of a "media attack by the enemy" on Ness' blog. "I see this as part of the Lord's work to 'purify' this Company," he wrote, "and perhaps even the whole 'Christian oil business' in preparation for what He is about to do.")

And still, devoted stockholders cling to hope. Some have even offered to band together to pay Sha's salary out of their own pockets if he returns to Ness' helm. James Cojanis, the San Jose retiree who bought $120,000 of the firm's stock, says he is thinking of investing another $100,000, a third of his savings. "One of these days the oil is going to come," he says. "And when it does, Ness' stock is going through the roof. I have no doubt that it will happen in God's perfect timing."